I want to expand on my post #138 (Quoted)
Supply and Demand.
The timeshare development model is based on getting all the profit up front at sale time. (Except Marriott DC point, which demand a cut every time they are traded.) What happens after doesn't matter to the developers, except for how it would affect the ongoing sales process. (That's why branded tend to do better that non-branded. They always have an ongoing sales process, somewhere. Having prospects trade into another branded property that is junk hurts the image. . . )
Otherwise the developers DON'T CARE what happens to a finished property. They only care about getting those units sold, whether or not to people who are suitable for the timeshare concept or not. Sell that unit, SELL THAT UNIT!
The long term result is a lot of timeshares sold, and many more our there to people who aren't a match to the product.
There are more units out there than there are people who want to use them for their intended use. In any product/market, when that happens, the value goes to $0 (or less). (A generic comment. Some systems/properties managed to "beat the system" with a stable ownership clientèle. They are few and far between, however. There are other niches, if you look hard for them. . .)
But on goes the building of new units. . . .
Let's look at house building. To build a house, one has to acquire the land, buy all the building materials, and hire the labor to build the house. This costs lots of money. The builder expects to get the money back, plus a profit.
How big of a profit? 20%? 30% if the builder is lucky? It (relatively speaking) is a thin profit margin.
Say a build builds a house at $300,000 and sells it at $400,000. People will take that building risk for that profit. But if nobody is willing to pay more than, say, $250,000, nobody will build houses in that market. And builder are always in competition with previously built houses. (Why buy a new house at $400,000, when you can buy a house a few streets over, used for say, $200,000?) This provides a feedback mechanism to stifle booms and busts. It only gets broken when there is a sudden huge change in the supply.demand dynamic. (A huge source of money is suddenly added to the housing market, a la the 2000's, a huge copmany moves into a small market, or, OTOH, suddenly everybody starts leaving an area, massive factory closing, oil bust, ect.) Normally prices don't get too far out of align with building cost.
Timeshares are economically different. By slicing up the "pig" (the timeshare apartment), the total profit margin goes up to 60-80%. It's such a fat pie that companies, will lie, cheat, misrepresent, and otherwise do just about anything to get that signature on the bottom line. Just like a house builder doesn't care what happens to his houses, (other than to his reputation for building quality) once they are sold, neither does the timeshare developer. But fat profit margins cut both ways. They imply that the timeshare has little actual value. The developer doesn't care, as long as there is an endless stream of people to con into signing on the dotted line.
Literally, no stream of new buyers - no business. (The only except to this plan is Disney, who owns the timeshares and only sells RTUs, and uses timeshares to funnel people into the theme parks, with a fat profit <from the theme park>. I'll bet Disney keeps real close tabs on net demand for its timeshares and does not overbuild.)
No timeshare developer (Disney excepted) makes any significant money from already sold timeshares, the 5% or so they get off of the MFs is chicken feed compared to new timeshare sales. Marriott has rigged their DC system to where they get 20-25% of the current cost of DC points as extra profit every time DC points are resold. (Unbelievable rich profit margin - no sales staff, no inventory, almost no extra paperwork, all pure profit for doing nothing. . . But note, DC points owner don't directly own a timeshare, just access to a pool of timeshares owned by the DC.)
Answers? The only answer would be legislative, and quite frankly would end the timeshare business as we currently know it. That just isn't going to happen. . .